Pancho Villa for Economics Minister in Argentina?
lnp3 at panix.com
Thu Dec 27 07:46:51 MST 2001
John Reed, "Insurgent Mexico":
[Pancho] Villa proclaimed himself military governor of the State of
Chihuahua, and began the extraordinary experiment -extraordinary
because he knew nothing about it-of creating a government for 300,000
people out of his head.
It has often been said that Villa succeeded because he had educated
advisers. As a matter of fact, he was almost alone. What advisers he
had spent most of their time answering his eager questions and doing
what he told them. I used sometimes to go to the Governor's palace
early in the morning and wait for him in the Governor's chamber.
About eight o'clock Sylvestre Terrazzas, the Secretary of State,
Sebastian Vargas, the State Treasurer, and Manuel Chao, then
Interventor, would arrive, very bustling and busy, with huge piles of
reports, suggestions and decrees which they had drawn up. Villa
himself came in about eight-thirty, threw himself into a chair, and
made them read out loud to him. Every minute he would interject a
remark, correction or suggestion. Occasionally he waved his finger
back and forward and said: "No sirve." When they were all through he
began rapidly and without a halt to outline the policy of the State
of Chihuahua, legislative, financial, judicial, and even educational.
When he came to a place that bothered him, he said: "How do they do
that?" And then, after it was carefully explained to him: "Why?' Most
of the acts and usages of government seemed to him extraordinarily
unnecessary and snarled up. For example, his advisers proposed to
finance the Revolution by issuing State bonds bearing 30 or 40
percent interest. He said, "I can understand why the State should pay
something to people for the rent of their money, but how is it just
to pay the whole sum back to them three or four times over?" He
couldn't see why rich men should be granted huge tracts of land and
poor men should not. The whole complex structure of civilization was
new to him. You had to be a philosopher to explain anything to Villa;
and his advisers were only practical men.
There was the financial question. It came to Villa in this way. He
noticed, all of a sudden, that there was no money in circulation. The
farmers who produced meat and vegetables refused to come into the
city markets any more because no one had any money to buy from them.
The truth was that those possessing silver or Mexican bank notes
buried them in the ground. Chihuahua not being a manufacturing
center, and the few factories there having closed .down, there was
nothing which could be exchanged for food. So, like a blight, the
paralysis of the production of food began all at once and actual
starvation stared at the town populations. I remember hearing vaguely
of several highly elaborate plans for the relief of this condition
put forward by Villa's advisers. He himself said: "Why, if all they
need is money, let's print some." So they inked up the printing press
in the basement of the Governor's palace and ran off two million
pesos on strong paper, stamped with the signatures of government
officials, and with Villa's name printed across the middle in large
letters. The counterfeit money, which afterward flooded El Paso, was
distinguished from the original by the fact that the names of the
officials were signed instead of stamped.
This first issue of currency was guaranteed by absolutely nothing but
the name of Francisco Villa. It was issued chiefly to revive the
petty internal commerce of the State so that the poor people could
get food. And yet almost immediately it was bought by the banks of El
Paso at 18 to 19 cents on the dollar because Villa guaranteed it.
Of course he knew nothing of the accepted ways of getting his money
into circulation. He began to pay the army with it. On Christmas Day
he called the poor people of Chihuahua together and gave them $15
apiece outright. Then he issued a short decree, ordering the
acceptance of his money at par throughout the State. The succeeding
Saturday the marketplaces of Chihuahua and the other nearby towns
swarmed with farmers and with buyers.
Villa issued another proclamation, fixing the price of beef at seven
cents a pound, milk at five cents a quart, and bread at four cents a
loaf. There was no famine in Chihuahua. But the big merchants, who
had timidly reopened their stores for the first time since his entry
into Chihuahua, placarded their goods with two sets of price
marks-one for Mexican silver money and bank bills, and the other for
"Villa money." He stopped that by another decree, ordering sixty
days' imprisonment for anybody who discriminated against his
But still the silver and bank bills refused to come out of the
ground, and these Villa needed to buy arms and supplies for his army.
So he simply proclaimed to the people that after the tenth of
February Mexican silver and bank bills would be regarded as
counterfeit, and that before that time they could be exchanged for
his own money at par in the State Treasury. But the large sums of the
rich still eluded him. Most of the financiers declared that it was
all a bluff, and held on. But lo! on the morning of February tenth, a
decree was pasted up on the walls all over Chihuahua City, announcing
that from that time on all Mexican silver and bank notes were
counterfeit and could not be exchanged for Villa money in the
Treasury, and anyone attempting to pass them was liable to sixty days
in the penitentiary. A great howl went up, not only from the
capitalists, but from the shrewd misers of distant villages.
About two weeks after the issue of this decree, I was taking lunch
with Villa in the house which he had confiscated from Manuel Gomeros
and used as his official residence. A delegation of three peons in
sandals arrived from a village in the Tarahumare to protest against
the Counterfeit Decree.
"But, mi General," said the spokesman, "we did not hear of the decree
until today. We have been using bank bills and silver in our village.
We had not seen your money, and we did not know...."
"You have a good deal of money?" interrupted Villa suddenly.
"Yes, mi General."
"Three or four or five thousand, perhaps?"
"More than that, mi General."
"Senores," Villa squinted at them ferociously, "samples of my money
reached your village within twenty-four hours after it was issued.
You decided that my government would not last. You dug holes under
your fireplaces and put the silver and bank notes there. You knew of
my first proclamation a day after it was posted up in the streets of
Chihuahua, and you ignored it. The Counterfeit Decree you also knew
as soon as it was issued. You thought there was always time to change
if it became necessary. And then you got frightened, and you three,
who have more money than anyone else in the village, got on your
mules and rode down here. Senores, your money is counterfeit. You are
"Valgame Dios!" cried the oldest of the three, sweating profusely.
"But we are ruined, mi General!-I swear to you-We did not know-We
would have accepted-There is no food in the village"
The General in Chief meditated for a moment. "I will give you one
more chance," he said, "not for you, but for the poor people of your
village who can buy nothing. Next Wednesday at noon bring all your
money, every cent of it, to the Treasury, and I will see what can be
To the perspiring financiers who waited hat in hand out in the hall,
the news spread by word of mouth; and Wednesday at high noon one
could not pass the Treasury door for the eager mob gathered there.
Louis Proyect, lnp3 at panix.com on 12/27/2001
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